Home Forex News Oil And Gold (XAU/USD) Enjoy Strong Gains Amid Concerns Of Slow Economic...

Oil And Gold (XAU/USD) Enjoy Strong Gains Amid Concerns Of Slow Economic Recovery

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  • Gold’s performance underpinned by strong fundamentals.
  • Coronavirus vaccine news may curtain gold gains.
  • Oil enjoys a strong run as demand improves, and output slashed.

Oil and Gold (XAU/USD) investors had an amazing time on Monday and Tuesday, thanks to the impressive performance of the two commodities. Both experienced an uptick in their price, especially gold, which has been demonstrating its strongest fundamentals in history. The gains were largely due to its appeal as a safe haven, especially with the escalating trade tensions between China and the U.S. Oil has enjoyed a strong run thanks to OPEC’s decision and other key oil players to slash production to reduce oversupply.

Crude oil outlook remains weak bearish to neutral with price key price targets expected at $32.32, $32.78, $33.22, $33.93 if it trades long above $31.12. Price targets will be expected at  $31.52, $31.23, $30.62, $30.08 if it trades short below $31.72.

Gold is expected to remain relatively bullish with key price targets expected at $1750.84, $1758.48, $1767.34, and $1783.67 if it trades long above $1746.41.

Gold and oil outlook

Note that the two commodities are affected differently by the same factors. For example, the U.S-China trade war may encourage investors to rush to gold, while the same factor discourages investors from investing in oil. This is largely because China is the second-largest oil consumer, and this means a trade war may affect its demand, which would, in turn, have a notable impact on global oil prices.

Gold’s impressive run is also at risk due to the coronavirus vaccine news. The precious metal has been benefiting from the coronavirus due to its safe-haven status. However, the news that a U.S-based pharmaceutical called Moderna made notable progress in its coronavirus vaccine phase 1 trial was encouraging enough for investors to switch to riskier assets. Nevertheless, the economy is still expected to experience slow recovery, which may lend some more room for gold to rally.

On the flip side, the coronavirus vaccine’s news is good for the oil industry because it means the economy has a chance at recovery. In other words, things will get back to normal, and demand for oil will improve; thus the rally in oil prices.

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